One of the most common questions after separation is: “Do we just split everything 50/50?” The short answer is no. Australian family law does not begin from an assumed equal division. Instead, the court works through a structured, principled process to reach an outcome that is just and equitable in the particular circumstances of the parties.
This guide explains how property settlement works after separation for both married and de facto couples, what the court takes into account, and the time limits that apply. For advice on a specific situation, see our Family Law practice-area page.
The legal framework
Property matters between separated married couples are dealt with under Part VIII of the Family Law Act 1975 (Cth). Substantively identical provisions apply to eligible de facto couples under Part VIIIAB. The Federal Circuit and Family Court of Australia (FCFCOA) has jurisdiction across the country, including for parties who lived together in Victoria.
There is no automatic 50/50 rule. The Act sets out a discretionary framework, and the outcome depends on the facts.
Step 1 — Identify and value the asset pool
The first task is to work out what there is to divide. The “asset pool” typically includes:
- the family home and any other real estate;
- bank accounts and investments;
- vehicles;
- household contents and personal effects;
- businesses and business interests;
- trusts (in some circumstances);
- superannuation entitlements (see below);
- debts and liabilities, including mortgages, credit cards and tax.
Assets are usually valued as at the date of the hearing or settlement, not the date of separation. That is one reason property division can move with market fluctuations.
Step 2 — Assess contributions
The court considers the contributions each party has made during the relationship:
- Financial contributions — property brought into the relationship, wages, business income, inheritances, gifts, redundancy payments and compensation awards;
- Non-financial contributions — for example, renovating a jointly owned home;
- Contributions as homemaker and parent — recognised as of equal weight to financial contributions.
Longer relationships often result in contributions being treated as broadly equal, but each case is fact-specific.
Step 3 — Consider future needs
The court then adjusts for the future needs of each party. Relevant factors include:
- the age and health of each party;
- income, property and financial resources of each party;
- the care and support of children of the relationship;
- a party’s capacity to earn income;
- the duration of the relationship and its effect on earning capacity;
- any child support that is being or will be paid.
A party who is the primary carer of young children, or whose earning capacity has been reduced by their role in the relationship, may receive an adjustment in their favour.
Step 4 — Just and equitable
Finally, the court asks whether the proposed order is just and equitable in all the circumstances. This is a discretionary check that guards against outcomes that, on the numbers, might follow the four-step process but do not feel fair on the ground.
Superannuation
Superannuation is treated as property that can be split under the Act, but it does not become cash on separation. Instead, a superannuation splitting order or agreement can transfer an amount from one party’s superannuation to the other party’s superannuation account, where it remains subject to preservation rules.
Defined-benefit funds and self-managed superannuation funds involve additional complexity and often require actuarial valuations.
Disclosure
Both parties have a strict duty of full and frank financial disclosure. That includes bank statements, tax returns, superannuation statements, business accounts and any relevant trust or company records. Failure to disclose can result in orders being set aside, costs orders, or adverse inferences at trial.
Reaching agreement without court
Most matters resolve without a contested trial. The main tools are:
- Negotiation between the parties and their lawyers;
- Family dispute resolution (mediation);
- Consent orders — an agreement approved by the FCFCOA and made into binding court orders;
- Binding financial agreements under Part VIIIA (or Part VIIIAB for de facto couples) — private agreements that meet strict statutory requirements.
Consent orders and binding financial agreements have different advantages and risks. In particular, only consent orders provide the certainty of a court-approved outcome.
Court proceedings
If agreement is not possible, either party may apply to the FCFCOA. Proceedings involve interim procedural hearings, disclosure, valuations, mediation, and, if unresolved, a contested final hearing. Court is slower and more expensive than negotiated settlement, and outcomes are less predictable.
Time limits
Strict time limits apply:
- Married couples — property proceedings must be commenced within 12 months of a divorce order becoming final;
- De facto couples — proceedings must be commenced within 24 months of the end of the relationship.
Late applications require leave of the court, which is not guaranteed. Do not assume you have unlimited time to sort things out.
When to obtain advice
Advice is often useful — and sometimes essential — where:
- either party owns real estate, a business, superannuation, or a trust interest;
- there was significant property brought in or inherited;
- there is a large disparity in income or earning capacity;
- family violence, coercion or financial abuse is a concern;
- you are considering signing a binding financial agreement.
Holt & Macdonald advises separating couples across Ringwood, Maroondah and Melbourne’s eastern suburbs on property settlement, superannuation splitting and related matters. See our Family Law page for how we work.
